Question

11, (20') The December cash record ofABB i Insurance follow: Date Cash Debit Check No. Cash Credit Dee 3 S 4,150 2416 2417 2418 2419 2420 2421 2422 5 850 160 670 1,690 1,450 1,200 640 16 23 31 560 2,190 1,870 ce's cash account shows a balance of $16,650 at December 31. On December 31, the company ABB Insuran received the following bank statement: Bank Statement for December Beginning Balance $14,000 sits and other Credits EFT ec $ 400 Dec. 2 11 19 22 29 31 31 Dec. 1 NSF S 700 4,150 540 560 2,190 1,700 Check NO. 2416 16 24 25 Check NO. 2417 Check NO. 2418 Check NO. 2419 850 400 160 670 1,960 BC SC 10 Ending Balance $18,590 Noles BC-bank collection, EFT-electronic funds transfer, NSF-nonsufficient funds check: SC-service charge Additional data for the bank reconciliation follows: a The EFT credit was a receipt of rent. The EFT debit was an insurance payment. b. The NSF check was received from a customer named Dunlap Chemical. c. The S1,700 bank collection was for a note receivable. 4 The correct amount of Check 2419 for rent expense is $1,940 instead of $1,490 on cash records. Prepare the bank reconciliation for ABB Insurance as at December 31. 2)Journalize any required entries from the bank reconciliation 2

Answer 1

Q11.
Bank Reconciliation Statement
balance as per bank statement				18790	(There is a difference in computing the bank balance with the beginning balance and entries given)
Add: Deposit in transit				1870
				20660
Less: Outstanding checks				3290
Adjusted balance as per Bank statementt				17370
Balance as per books				16650
Add: EFT for rent receipts				400
Add: bank Collection				1700
				18750
Less: NSF check				700
Less: Error in recording rent expenses				270
Less: EFT payment for insurance				400
Less: Service charges				10
Adjusted balance as per books				17370
Journal entries:
S.no.	Accounts title and explanations				Debit $	Credit $
1	Cash account Dr.				400
	Rent revenue					400
2	Cash account dr.				1700
	Accounts receivable					1700
3	Accounts receivable-Dunlop Dr.				700
	Cash account					700
4	Rent expenses Dr.				270
	Cash account					270
5	Prepaid insurance Dr.				400
	Cash account					400
6	Misc. expenses Dr.				10
	Cash account					10